The Cost of Not Hiring
It’s no secret: Lawn and garden centers operate on money and people, and it takes people to turn a profit. Hiring good people to fill your most pressing vacancies is a challenge every business owner faces, whether it is a small, family-owned operation or part of a large chain. It takes definition of job requirements along with good interviewing skills and reference checks to recognize high-performance team players when you see them. Recruiting is a vital function that could make or break your business.
But what about the owners or managers who are reluctant to hire people they need in an attempt to save money? These are the people who are always looking for ways to reduce expenditures, and many ask their workforces to bear the cost of transition through belt tightening. Think about this: How cost-effective is it not to hire someone to do the work that needs to be done? Are you pinching pennies, or are you really saving money when you make a decision not to hire? When do you reach the point where you recognize that a decision not to hire is actually costing you money?
Some business owners clearly understand this concept, but others don’t. As a result, they miss opportunities to take their businesses to the next level with the help of their most valuable resource: human capital.
Consider This
As the owner or manager, you have three main goals: Hire the best people for the job, contain costs and make a profit. With this in mind, ask yourself this: When you don’t hire someone to fill a vacancy that you know really needs to be filled, how does it impact your bottom line, customer service and staff morale? How much revenue is potentially lost because you failed to hire someone you needed to do a specific job?
It’s difficult to measure these losses because the actual dollar costs can vary greatly depending upon the business and specific job opening left vacant. To help you evaluate the tangible and intangible costs, here are some things to consider if you decide not to hire when you know you should or have a feeling that you would benefit in the long run from doing so:
Evaluate employees’ impact. Look at every individual on your team, including part-timers and seasonal help. Then ask yourself, “What is the financial impact of this employee?” For example, how does a sales associate, buyer, delivery driver, store manager or bookkeeper impact your bottom line? To prove a point, try moving an unskilled employee into a vacant position and watch how that person weakens your team. This can happen before you know it.
And if you decide not to hire but instead divide the work among the employees who remain, you may find yourself with unqualified people taking on challenges that they are not capable of doing and/or have no desire to do. Or you may end up with disgruntled employees who are sick and tired of being asked to do more with not enough help because you made the decision not to hire.
Anticipate needs. What if you don’t get your merchandise stocked or delivered to the customers or the marketplace on time because you don’t have enough of the right employees to do the work? Fortunately, this is not a common problem, but it can and has happened to some unprepared business owners. It’s avoidable if you plan ahead and hire when business dictates that you do so. This is another example of a missed opportunity that could affect your profitability today and beyond.
Keep everyone happy. Sometimes the impact of a shortage of employees puts so much stress and pressure on the rest of your team members that they become less productive and unhappy, and some even quit. When owners and managers create a stressful work environment for their employees because they are short-staffed, everyone suffers. Some employees may become vigilantes and will secretly undermine or sabotage you and the business to spite you for being insensitive to the fact that they are short-staffed. You may not realize this is happening until the damage has been done, and it can cost you a fortune!
For example, a garden center in my community where I enjoy shopping never seems to have enough help. I know the owners, and they feel they cannot afford to hire additional people, not even during their busy season. This husband-and-wife team is accustomed to working 80-hour weeks, and they expect their employees to do the same. The owners confided in me that they caught two of their 11 employees stealing cash and merchandise. When confronted, it became clear to the owners that the employees were stealing because they resented having to work so many hours, yet they couldn’t afford to quit. They were supplementing their incomes by stealing and getting back at the owners at the same time. They were both fired and never replaced. This kind of problem could have been prevented along with the headaches it caused.
Invest in your future. Think of hiring as an investment in the future of your retail business rather than a liability or something that you would rather avoid doing. Ask yourself how your business could grow and become more profitable with the right people in place. In today’s competitive business world, those who cannot or are unwilling to change and improve often fall behind, sometimes for good. Are you enhancing your service level with your existing team as your customers and the marketplace demand more, or are you fighting just to keep your head above water? Additional human capital could be critical to the future success of your business.
Stay ahead. When you don’t have the people you need in place to do the required work, you run the risk of losing your position in the marketplace to lawn and garden centers that do have enough of the right people working for them. Every business has competition that could be as close as down the street or around the corner, or even online. If you don’t have the staff to serve your customers today, you may find that your business will quickly be forced to take a backseat to the competition tomorrow.
Treat employees well. Have you ever had the misfortune of having to cut store hours because you didn’t have employees who could serve your customers? It rarely happens, but it can happen. The ability to sell is critical, and highly skilled and motivated employees can be difficult to find. And if they are not happy once you have hired them, your competition is standing by to lure them away from you. Good employees always seem to be in short supply. Hire them when you need them and take care to keep them challenged, well trained, up-to-date on the latest information and proud to be working for you. Remember the golden rule: Treat others as you want to be treated. And don’t forget the platinum rule: Treat others as they want to be treated. If you don’t know how they want to be treated, ask them. Employees like being asked for their opinions and advice, especially when it comes to anything that directly impacts them.
Keep your customers. An understaffed store will often lose customers, and those valued customers are usually hard to replace, not to mention the goodwill that you have worked so hard to establish and maintain. Customers who are not given the attention they deserve and expect will take their business elsewhere. They will put up with only so much inefficiency and inability to meet their needs, and then they are gone. They don’t usually tell you why they’re shopping elsewhere you simply never see them again.
In a real-life example, a couple built a 6,500-sq.ft. home on two acres of land that cried out for professional landscaping. They hired a landscape architect to design a plan, but they wanted to do their own shopping for the trees, plants and flowers the home so desperately needed. They were also looking for a very special fountain. They live in a large city and had plenty of options.
They started with the garden center closest to their home; as business owners themselves, they believed in supporting their local businesses. They were immediately turned off by the lack of attention they received. The owner was not there, and the sole employee on duty was not knowledgeable or able to answer even their most basic questions. They left, disappointed, and never looked back. They then drove to the next garden center on their list and spent more than $25,000 on trees and plants. They were so delighted with the customer service they received that they went back and spent almost $20,000 more! If the business they’d walked away from only knew…
Follow The Steps
Consider this four-step process when you are tempted not to hire:
Step 1. Evaluate how much work you and your employees are doing right now that is “above and beyond” what’s expected and outside of regular job duties. Do this by making a list of the tasks and estimating how long it takes to complete each one. Identify the tasks that could be handled by a newly hired person and thus relieve your most valued employees from the mounting pressure that is preventing them from getting their own work done. This will help you decide what hiring decisions make the most sense.
Step 2. Think about the potential opportunities if your current staff were relieved of the excessive workload they are now facing. For instance, could your employees be financially more productive if they weren’t bogged down with assignments that could be handled by a new hire or seasonal employee? What about stocking shelves? Although very important, it’s not something you want to assign to your top sales associates. Their time is better spent interacting with customers and doing what they do best.
Step 3. Determine the savings generated by hiring someone to do the work you need done. As mentioned earlier, you might even prevent turnover and the costs associated with it. Additional compensation can’t always make up for the stress that employees feel when they are overworked, and to some employees, it’s not worth the aggravation, so they quit.
Step 4. Evaluate the health costs for you and your employees? Overworked employees are prone to illness and accidents, and they often don’t take time to exercise and relax, which is something every employer should encourage. However, if you don’t do this for yourself, you probably don’t do this for your employees. Consider the potential future cost if employees can’t get work-related stress and health issues under control. In addition, have you considered the stress and pressure on your employees because their family members are demanding a balance between work and home life? This can be avoided if you are sensitive to your health needs and those of your employees.
Make The Right Move
Most of the cost savings and benefits associated with hiring when you need to are concrete and measurable, while others are intangible. Your actual cost to pay the wages and benefits of a new hire should be weighed against the intangible drawbacks of not hiring the people you need when you need them. Before you decide not to hire, evaluate the positives as well as the negatives associated with your decision.
There are, of course, times when not filling a vacancy is the most logical thing to do. There are other times when the decision not to hire is a foolish, costly mistake that could impact your profitability for years. Think about what speaks for your decision and what speaks against it. Never hire on impulse. And don’t drag your feet when your business sense, as well as your heart, tells you that it’s the best move for you as well as the people you employ.lg110705
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